James Murdoch and Robert Peston turn the air blue

Relations between the BBC and Rupert Murdoch's News Corporation are often rather frosty, but they have not descended to public slanging matches – until now.

Robert Peston

By Richard Eden

11:52PM BST 29 Aug 2009

At a dinner for the great and the good at the Edinburgh television festival on Friday, Murdoch's son James was discussing broadcasting policy with Robert Peston, the BBC's business editor.

Just before the dinner, Murdoch, who runs News Corp's operations in Europe and Asia, had expressed some trenchant views about the extent to which the BBC should be shrunk, in his James MacTaggart memorial lecture.

As the debate continued between Murdoch and Peston, who have been friendly sparring partners for several years, this was one point that Peston could not accept, however. "If the BBC were to be abolished, leaving Sky as the only big beast in the UK news jungle, would that really be good for democracy?" he asked.

At this point, onlookers say, Murdoch exploded, giving Peston a forceful piece of his mind. Peston then returned fire, apparently saying: "Hang on a ––––ing minute, James."

I am assured that, after what Murdoch later described as "a vigorous exchange of views", the pair parted company on friendly terms.